Bitcoin's price moves in cycles. Each cycle takes time to unfold, and predictable patterns are within each cycle. The halving event is one of the most predictable factors influencing Bitcoin’s price movements. Each halving event reduces the supply of new Bitcoin entering circulation by half, historically leading to a dramatic increase in Bitcoin’s price. But what is Bitcoin halving and how exactly does the Bitcoin halving affect the price? This article will explore the Bitcoin halving effect on price and provide clear, data-backed insights into how Bitcoin halving might have impacted Bitcoin price movements.
You can prepare for the 2024 Bitcoin halving by reading Bitcoin analysis. The insights provided by Bitcoin Magazine Pro’s Bitcoin analysis can help you gain clear, data-backed insights into how the 2024 Bitcoin halving might impact price movements, helping you make informed investment or strategic decisions.
What is the Bitcoin Halving Cycle?
Halving Bitcoin is an essential event in the world of Bitcoin that impacts investors and others involved. Approximately every four years, the reward for mining new Bitcoin blocks is cut in half.
This is done to control the supply of Bitcoin and make it more like scarce resources such as gold. The halving helps keep Bitcoin's value stable over time by reducing the rate at which new Bitcoins are created.
Why Bitcoin Halvings Occur
Bitcoin halving was introduced by its creator, Satoshi Nakamoto, to control inflation and ensure the digital currency remains a deflationary asset. Miners received 50 bitcoins as a reward for processing transactions and supporting the blockchain network.
After the first halving in 2012, this reward was cut to 25 bitcoins, and it has halved subsequently at regular intervals, with the reward decreasing further each time.
A History of Bitcoin Halvings
Bitcoin's halving history is fascinating. It shows its growth from its beginnings in 2009. Since then, Bitcoin has experienced several halving events, each playing a big part in its development.
The First Halving (November 2012)
The inaugural Bitcoin halving occurred when the network reached 210,000 blocks. The mining reward was reduced from 50 to 25 bitcoins per block. This event marked the first test of Satoshi’s theory of controlled money supply and deflationary economics.
Despite initial uncertainties, the Bitcoin network remained stable, and the aftermath saw the price of Bitcoin catapult from $10.59 to $126.24 within 180 days, reinforcing the viability of its underlying economic principles.
The Second Halving (July 2016)
With bitcoin firmly established in the public consciousness, the second halving reduced the block reward to 12.5 bitcoins.
This period saw the rise of Bitcoin as a legitimate investment class, with increasing participation from both retail and institutional investors. Following this halving, bitcoin experienced a significant rise, peaking at over $1002.92 and laying the groundwork for the bull run of 2017.
The Third Halving (May 2020)
This halving reduced the reward to 6.25 bitcoins per block. Investors watched this halving closely amid global economic uncertainties due to the COVID-19 pandemic.
It played a crucial role in Bitcoin’s remarkable performance through 2020 and into 2021, with BTC reaching new all-time highs of $14,849.09 within 180 days and becoming a focal point of discussions around digital currencies’ role in the future of finance.
The Fourth Bitcoin Halving (April 2024)
Bitcoin last halved on April 19, 2024, resulting in a block reward of 3.125 BTC.
How Many Bitcoin Halvings are Left?
If Bitcoin maintains its schedule of one halving every four years, are 29 halvings left (as of 2024). Bitcoins can be divided into smaller denominations called satoshis, equivalent to 0.00000001 bitcoin. Block rewards will drop to this amount in 2136, and the last satoshi is expected to be awarded right before the last halving in mid-2140.
Bitcoin Halving Impact on the Miners
The impact on bitcoin miners varies. Power costs associated with running energy-intensive mining equipment make up the largest expense for miners, typically accounting for 75-85% of a miner’s total cash operating expenses. Current power costs for the listed universe average around $0.04/kWh.
The all-in cash costs of the top 10 listed miners will be about $45k/bitcoin post-halving. Larger miners with lower per-coin costs will see their margins shrink but likely remain profitable, especially if the bitcoin price appreciates.
The Impact of Bitcoin Halving on the Mining Industry and Market Dynamics
The halving will likely lead to consolidation within the mining industry, with smaller miners being squeezed out and larger players expanding their market share. This trend is already in place, as publicly traded miners now control a record % of the hash rate. Bitcoin mining equities have recovered strongly post-halving and outperformed the spot price in halving years.
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A Closer Look at the 2024 Bitcoin Halving Effect on Price
Bitcoin halving occurs every 210,000 blocks, so the event happens approximately every four years. Halving aims to restrict BTC’s supply and decrease the rate at which the new coins are mined. Bitcoin has a maximum supply of 21 million coins. The estimation is that the last halving will occur in 2140.
The latest halving occurred on April 19th, 2024. After the halving, the reward for mining a new Bitcoin dropped to 3,125 BTC from 6,250 BTC. It was the fourth BTC halving from the currency’s release. The halving block was the 840,000th on the blockchain. The mining fee was over $2.6 million, about 6 times more than the $450K prize for several blocks before that. At this point, nobody explained why this happened. An assumption is that investors worldwide have paid more to ensure their transfer is among those in the special block.
Bitcoin Price Performance Before and After the 2024 Halving
If we analyze the BTC price a few months before the halving, we’ll see that the coin was worth $51,669 on February 22nd, 2024. It was an exciting week for Bitcoin since it exceeded the $62,000 mark by the end of the month.
After a few days of stabilization, the value kept increasing. Bitcoin reached its all-time high on March 14, 2024. It was $73,750 at that point. BTC had major fluctuations during March, so it didn’t keep that value for long. It dropped to under $62,000 but bounced back to $69,641 on March 31st, 2024. BTC’s value on the day of halving was approximately $63,000.
Bitcoin's Price Journey: Surges, Fluctuations, and New Highs
A minor spike occurred in the following three days, leading the coin’s worth to over $66,000. Then it went as low as $58,568 on May 1st, which was surprising. After a week or two of considerable fluctuations, BTC regained its value.
Bitcoin was worth $70,610 on May 21st, 2024. Following Donald Trump’s victory in the Vovember elections, Bitcoin faced increasing buying activity. As a result, the BTC price broke through the $100K mark and formed a new ATH. The price is currently aimed at maintaining its buying demand above $100K.
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Will BTC Price Surpass $100K Post-halving?
Bitcoin is approaching a significant milestone, with the potential to hold above $100,000. This surge in value is partly attributed to the broader market response to Donald Trump’s election.
Bitcoin's price has doubled since the beginning of the year, but it has seen a notable 45% increase in just the two weeks following the presidential election. This boost has solidified Bitcoin’s role in the so-called “Trump trade,” with the president-elect’s positive stance on the industry fueling investor optimism about this emerging asset class. As Bitcoin on-chain activities surge, questions arise, such as:
- Does Bitcoin have the potential of hitting the $100K mark?
- Will Bitcoin go up?
- Where will Bitcoin be in 5 years?
Some factors speak in favor of both bearish and bullish times for Bitcoin. Many experts are confused because BTC usually achieves a new all-time high after the halving.
Bitcoin Halving: Pre-Event Price Movements and Expert Insights"
This time, it occurred before the event. According to the specialists from JPMorgan, the expected price changes regarding the halving process were already factored in before the event.
That’s why it’s hard to expect that halving will have a huge impact on BTC’s worth. As for the medium-term outlook for Bitcoin, the experts are optimistic. That’s also not because of the halving but the general market conditions.
Goldman Analysts Highlight Bitcoin ETFs and Supply Dynamics as Key Drivers
Goldman’s analysts believe that the main factor affecting the price performance will be the increased demand for Bitcoin ETFs, which have been approved this year. There’s also the overall supply-demand dynamic. The halving event affects it in the long run since the reduction in mining prizes means that BTC scarcity is higher than before.
Experts believe this won’t affect Bitcoin as much in the short run as it will in the long run. The next halving event is in four years. As we get closer to it, we might see BTC gaining more value due to the increased demand to gain before the rewards drop by 50% again. That makes Bitcoin an attractive long-term investment if that option is in your portfolio.
Why Bitcoin Should Have a Bullish Market in 2024 and Beyond
Halving is among the reasons Bitcoin could positively impact in 2024. Miners suffer the biggest hit with each halving event since their prizes decrease, and they need to optimize mining rigs. But if we look at Bitcoin price-wise, the increased coin’s scarcity should lead to a jump in value.
Despite that, experts are unanimous that the BTC ETF’s acceptance is the main factor in Bitcoin’s price increase in 2024. An exchange-traded fund (ETF) opens the market to investors otherwise focused on stocks. The ETF concept classifies the investment as a stock so that this approval can mean significant income flow into the Bitcoin market. And if we consider Bitcoin’s reputation, it’s clear why BTC stands to profit the most from that.
Why Bitcoin Should Have a Bearish Market in 2024 and Beyond
Although ETFs make BTC more open to investors, many still fear regulatory issues. The unregulated environment at a global level negatively affects investor mood. Many lawsuits, like the famous Ripple vs. SEC case, aren’t a positive sign for potential investors. Market volatility is another issue that some investors don’t appreciate. Some traders dislike scalability and environmental sustainability issues, which could damage BTC’s reputation in the future.
What Can You Expect From BTC Price Analysis Next?
Analyzing the daily Bitcoin price chart, we see that BTC’s price faces buying pressure as it aims to hold above $107K. In recent hours, BTC's price has been around the $106K region. The 24-hour volume has surged to $46 million, raising interest in trading today.
BTC is trading at $106,881, surging by over 2.5% in the last 24 hours. The RSI-14 trend line has surged from its previous level but trades around the buying region at 71, hinting that bullish pressure is on edge. The SMA-14 level suggests volatility in the next few hours.
BTC/USD 4-hour Price Chart
Bulls aim for an immediate correction. The 4-hour Bitcoin price chart suggests that bulls are strengthening their position as they aim to hold the price above the EMA trend lines. Bulls are maintaining buying confidence as the BTC price aims for a retest of resistance.
The BoP indicator trades in a bullish region at 0.15, showing that short-term buyers are taking a chance to accelerate an upward trend. The MACD trend line has formed green candles above the signal line, and the indicator aims for positive momentum, strengthening long-position holders’ confidence.
Bitcoin Price Prediction 2024
Bitcoin's price has increased significantly in the year following its halving, and it is expected to continue rising. Bitcoin miners might play a crucial role in maintaining bullish sentiment for future price movements. Bitcoin spot ETFs are projected to be a key driver of Bitcoin prices and the broader market in 2024.
There is an increasing bullish sentiment that the base interest rates could be cut in the US, thus helping to further Bitcoin's upward movement. The outcome of 2024 could be positive for Bitcoin, with its price touching $110,000 at its highest and around $88,000 at its lowest.
Bitcoin Price Prediction 2025
The Bitcoin Halving event’s impact is expected to last into 2025, potentially holding the Bitcoin price above the $100,000 mark. If the global economy strengthens and inflation stabilizes at 2%, interest rates could be reduced by 2025. Clearer regulations could boost BTC investor confidence, leading to more buying demand amid scarcity due to halving. Following the halving event over the next 12-18 months, BTC price is expected to surge toward $160,000, with a minimum price of $95,000.
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